Budget Process Procedure

Associated policy, standard(s), and/or regulation(s): Budget Process Policy, NWCCU 2.E.2, 2.E.3
Responsible Unit: Finance | Executive Lead: CFO
Created: 11/2011 | Reviewed/Revised: 6/2015, 6/2016, 1/27/2023 | Effective: 1/27/2023 

Procedure:  

The following is an outline of the budget process: 
  
Base Budget Template from Finance to Budget Directors              Target Due 12/31- 01/31 
The Office of Finance is responsible for providing the Base Budget template to all budget directors (executives and directors with budget authority).  The base budget template includes the following: 

  • Staffing Pattern – A line item detail of current staff and contractual agreements based on current hourly/salary rates, benefits and a preliminary annual COLA increase, (actual COLA to be approved upon budget consolidation and approval).  The staffing pattern includes all consultants, whether via purchased services, accounting & legal, public relations, computer services or similar services. 
  • For new staff proposals (non-replacement) submit a completed Pre-Approval Cover sheet.  See related documents. 
  • Professional Development / Travel & Meetings – A line item detail by employee based on contractual agreements and/or College or university policy. This amount is subject to overall approval and/or adjustment based on overall budgetary constraints. 

Other Budget Detail – For any department line items greater than $10,000 finance will project the account by the review of past year’s detail by vendor or sub-category and discuss any variances to the current year projection, such as applying increases based on student enrollment, COLAs, etc. 

The overall focus with the budget directors is to focus on expenses he/she has control over. For example, budget directors have minimal control over utilities or similar infrastructure accounts, but he/she may have substantial control over staffing or setting policies that drive the expenditures, such as what student expense items will be paid by the university. 
  
Budget Director Review                
Budget Authorization for current Budget Director (See Related Documents) Due February 15 
Budget Directors are responsible for the following: 

  • A line item review of the Base Budget template, with corrections if any 
  • Input as to changes from one year to the next, including significant vendor price increases, increased usage, etc. 
  • Proposed new programs, staffing or other expenses summarized with the appropriate supporting documents (see below). 
  • Internal Proposal – All new requests for programs or services > $10,000 must include a completed Internal Proposal. 
  • Pre-Approval Cover Sheet –Requests for new staff proposals (non-replacement. 
  • Capital Equipment Request:  Equipment requests > $5,000 and a useful life of > one year must include a completed Capital Equipment Request. 

 The Budget Authorization list is updated and approved annually with the budget narrative. 
  
Return to Finance for Corrections / Updates & Ongoing 

Back to Budget Director for Pre-Consolidation Review (Quick)       Final to Finance                    
By February 
  
Finance Consolidates Budget for Review by the President, Chief Officers, & Deans  
By February 

  • The budget collaborative team (President, Chief Officers, Deans, CFO and Controller) review the overall budget for the university and individual Colleges to ensure the budget: 
    • Aligns with the university mission, core themes and initiatives 
    • Is in accordance with existing policies and procedures and 
    • Is sustainable financially. 

The team presents recommendations for new programs, proposals, cuts, or re-allocations. Additional supporting documentation is requested regarding proposals or missing information, such as bids for Capital Equipment Requests, an Internal Proposal, or other comparisons. The pros and cons of the various options are summarized and supported by applicable documents. 
  
This is a collaborative team meeting where all participants are required to work together to come to reasonable compromises with the given constraints or opportunities.  
  
Budget Director Comments March 

  • Recommendations are presented to Budget Directors for review and comment. 

 Budget Collaborative Team                                                                                                         March-April 

  • Responds to review by Budget Directors and addresses open items. 
  • Upon completion, changes are rolled into Master Budget for presentation to Finance Committee with recommendations for Final Budget 

Finance Committee April Meeting 
Provides input and approves or disapproves with action items. 

  • Executive Team and / or individual Budget Director responds to action item. 
  • Finance Committee approves and recommends to full board 

 Board approves final Budget by April Board Meeting 
  
Final Budget is implemented By June 30 
  
 Other Budget Policies and Procedures: 
  
Budget Director Authority 

  • Budget directors have the authority to shift funds from one line to another as long as certain criteria are met: 
  1. The shift is consistent with College and University policies and procedures. 
    • See Pre-Approval Cover Sheet procedures. Any new hires must be approved by the positions listed on the Pre-Approval Cover Sheet. 
    • See Contract Approval procedures via the Pre-Approval Cover Sheet. 
  2. The overall department budget is the same or less. 
  3. Directors are encouraged to share budgets and collaborate with other budget directors when overlap exists. 
  4. Any change affecting other departments must be approved prior to the change. 
    • For example, any implementation of software requires IT approval. Having the money for software in your budget does not ensure IT has the necessary resources to implement and support it.  
    • Any change affecting facilities or security must be approved by the applicable budget director. 

 Budget Changes 

  • Proposals to reclassify expenses within College or University policies do not require the approval of the Board of Trustees’ Finance Committee unless the dollar amount of the change is greater than $100,000 and causes the University to be over budget in total by greater than $100,000, or is a substantive change to the original budget (i.e. new program).  
  • Consideration must be given to the impact on cash flows. 

 Procedures for Budget Directors to Submit a Mid-year Budget Change 

  • The budget director must complete a Budget Change Form along with the applicable support (see the Internal Proposal template), including but not limited to the following: 
  • Pre-Approval Cover Sheet 
  • Capital Equipment Request 

Substantive changes, such as the addition of a new program, must be supported by a complete Internal Proposal, addressing issues such as a needs assessment, personnel requirements, finances, space, timing, accreditation, and support needed by other departments. 

Appendices: 

N/A 

Policy Resources

For assistance with policies and procedures contact:

Lori Fulton
lfulton@pnwu.edu